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  • SYSTEMS OR PEOPLE?

    In an article on succession planning in the Australian Business Review Weekly 9 – 15 September 2004 Edition, David James, management and leadership writer, claimed there is emerging evidence of poor succession planning in Australia’s larger public companies. He stated it a given that, at least in public companies, leaders must be Type A, that is, people who are self-centred and ambitious (and usually forceful and arrogant). He then linked leadership with the idea that companies perform best when they rely on systems rather than individuals. We take issue on both counts:

    Firstly, while Type A leaders might have been preferred in command and control management systems, there is now a much greater emphasis on the fair, firm, friendly and considerate yet strong leader who understands that people not systems make the difference. Largely for reasons of self-protection, self-centred managers (we can’t call them leaders!) don’t place priority on developing successors, and that is why we don’t have enough of them. But good people-oriented leaders have always identified, mentored and developed their successors.

    Secondly, the ‘systems’ James refers to (and we think he was talking essentially about those that comprise a company’s organisational culture) are certainly vital to the success of organisations. However like good teams, the systems don’t just happen; they are made by the individuals in the organisation. These include individuals and leaders at all levels but in particular the CEO. And if, as James suggests in the Toyota example he quotes, systems and not individuals are the reason for a company’s success, why do CEOs whose behaviour is shaped by the ‘system’ that already exists, yet are required to lead the organisation into the future, receive such exorbitant rewards?

    Peter McDougall

    September 2004